EKP was formed November 5, 1920, as the Central Committee of the Estonian Sections of the Russian Communist Party (Bolsheviks) was separated from its mother party. During the first half of the 1920s the hopes to an immediate world revolution were still held, and Estonian communists had their own hopes of restoring their power. Widespread economic and social crisis gave lots of support for that kind of hopes. Activists of the party had not only to support the agenda, but also to be ready to participate in the illegal actions, such as organising conspirative apartments, transporting weapons and communist propaganda materials, hide undercover activists and collect information for the revolutionaries. It resulted in a standing conflict situation with the governments. As oriented not to the legal goals EKP never tried to legalise itself in the Estonian Republic, as well as didn't abandon demands for the armed uprising and joining Estonia to the USSR.

Although EKP had dropped much below from their popularity of 1917, it still had remarkable support mostly amongst the industrial proletariat, but occasionally also amongst the landless peasants, unemployed, teachers and students. Especially in the 1920s it had strong positions in the trade union movement. In the parliamentary elections EKP front organisations took always more than 5% of the vote. However, following the failed coup attempt by the Estonian communists on December 1, 1924, the party lost this support and membership fell to around 70 to 200 people and remained low until 1940. According to the ECP's own records, there were only 150 party members at the time of the Soviet occupation in July 1940.

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Like in the rest of the Russian empire, the RSDLP branches in the Governorate of Estonia had been ravaged by division between Bolsheviks and Mensheviks. In 1912 the Bolsheviks started a publication, Kiir, in Narva. In June 1914 the party took a decision to create a special Central Committee of RSDLP(b) of Estonia, named the Northern-Baltic Committee of the RSDLP(b)" (Estonian: VSDT(b)P Põhja-Balti Komitee).

After the February Revolution, as in the rest of the empire, Bolsheviks started to gain popularity with their demands to end the war immediately, as well as their support for fast land reform and originally even ethnic claims (to introduce Estonian as an official language parallel to Russian). During the summer of 1917 Bolsheviks and their supporters took the control over the Tallinn Soviet.

By the end of 1917 Estonian Bolsheviks were stronger than ever - holding control over political power and having significant support - remarkably more than in Russia. In the elections into the Russian Constituent Assembly their list got 40,2% of the votes in Estonia and 4 out of 8 seats allocated to Estonia. The support for the party did however start to decline, and the Estonian Constituent Assembly election of January 1918 was never completed. Moreover the party faced the situation in which it had difficulty building alliances. Their opponents, the Democratic Bloc, was able to initiate cooperation with the Labour Party, Mensheviks and the Socialist-Revolutionary Party. Those parties supported different ideas but were united around the demand for an independent or Finland-linked Estonia and wished to distribute land to the peasants. In the first question the Estonian Bolsheviks, although having introduced Estonian as an official language after their takeover, promoted the idea of Estonia as a part of Soviet Russia. In the land reform policy, Estonian Bolsheviks continued to support immediate collectivisation.

Bolshevik rule in Estonia was ended by the German invasion in the end of February 1918. The party branch continued to function in exile in Russia.

After the German revolution in November, when an Estonian government took office, the party together with support of Soviet troops attempted an armed attack against the new state. However, by this time the support for the party had waned, and it failed to mobilize mass support for revolutionary warfare. An Estonian Workers' Commune was set up, but with limited real influence. At this time the party branch had been reorganized into the Central Committee of the Estonian Sections of the RCP(b) (Estonian: Venemaa Kommunistliku (bolshevike) Partei Eesti Sektsioonide Keskkomitee). After the war a reorientation was found to be necessary (since Estonia was now an independent state) by the central leadership of the RCP(b) and thus on the November 5, 1920 the Communist Party of Estonia (EKP) was founded as a separate party.